On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning
Question:
On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning December 31, 2016. Pearson's incremental borrowing rate was 9% and the lessor's implicit rate, known by Pearson, was 10%. The present value factors of an ordinary annuity of $1 for six periods for interest rates of 9% and 10% are 4.48592 and 4.35526, respectively.
Refer to Exhibit 20-1. What would be the balance of the lease obligation on January 1, 2017, for financial reporting purposes after the lease payment? (round answers to the nearest dollar)?
Refer to Exhibit 20-1. What would be the interest expense for 2016 (round answers to the nearest dollar)?
Refer to Exhibit 20-1. What would be the balance of the lease obligation for financial reporting purposes on December 31, 2017, after the lease payment (round answers to the nearest dollar)?